New Delhi: Oil ministry has asked refiners to prepare for a ‘drastic reduction or zero’ imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the United States to cut trade ties with Iran.
Foreign minister Sushma Swaraj has said it does not recognise unilateral restrictions imposed by the US, and instead follows UN sanctions.
But industry sources said India, the biggest buyer of Iranian oil after China, will be forced to take action to protect its exposure to the US financial system. The oil and petroleum ministry held a meeting with refiners on Thursday, urging them to scout for alternatives to Iranian oil, the sources said.
“(The government) has asked refiners to be prepared for any eventuality, since the situation is still evolving. There could be drastic reduction or there could be no import at all,” said one of the sources. During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil.
India may withdraw duty hike decision
India on Thursday indicated that it may withdraw the notification imposing additional duties on 29 US products, to be effective from August 4, if both the sides are able to sort out the differences over tariffs, official sources said.
“The implementation date for the notification is August 4. We are hopeful of resolving the tariff issues before that,” they said.
These issues were discussed during the three-day meeting between senior officials of both the countries.
It has been decided that another official level meeting will be held next month in the US.
“A delegation will visit anytime after the mid of next month to finalise the final list of identified products on which a certain kind of announcement would be made by political leaders of both the sides,” they added.
US wants complete ban from November
- While a State Department official has said that Washington wants Iranian oil buyers to halt imports from November, US Ambassador to the UN Nikki Haley told PM Modi to cut dependence on Iranian oil.
- Haley, currently in Delhi, spoke with US Secretary of State Mike Pompeo early on Wednesday, before meeting Modi.
- The US push to curb countries’ imports of Iranian oil comes after President Donald Trump withdrew from a 2015 deal between Iran and six world powers and ordered a reimposition of sanctions on Tehran.
- The options to find replacements to Iranian oil have widened after OPEC agreed with Russia and other oil-producing allies last week to raise output from July.
OUTPUT BOOST FROM OPEC
- Under pressure from the US sanctions, major oil refineries have decided to or are preparing to halt Iranian oil imports from November, a source said.
- To boost its sales to India, Iran recently offered virtually free shipping and an extended credit period of 60 days but India cannot accept offer amid pressure.
- Removing Iranian oil from the global market by November as called for by the United States is impossible, an Iranian oil official said.